Post on 30-Apr-2018
1
Container Terminals Operations & Planning
Presentation
Long Beach, CA
September 10, 2013
Copyright 2013 by CH2M HILL Inc.
Reproduction and distribution in whole or in part beyond the intended scope of the contract
without the written consent of CH2M HILL Inc. is prohibited.
2
Terminal planning process
Defining needs and implementation timelines
Focusing on improvement projects
Keeping it financeable
Project examples
Agenda
3
Planning provides a comprehensive assessment of port
and market characteristics…
Port mission statement
Existing facility infrastructure and capabilities
Competitive position
Port customer’s long term business objectives
Future market opportunities and strategic initiatives
Both near-term and long-term needs
Applications of technology
Facility layouts to optimize capacity, utilization, and operations
Cost considerations and potential funding sources
…providing a roadmap for success that responds to future market opportunities and implementation flexibility
4
Project Phase
Planning provides answers to questions that span Strategic,
Technical, and Tactical issues
What Where When Why Who How
Facility
Assessment
Market
Assessment
Needs
Assessment
Facility Plan
Development
Strategic Plan
Implementation
Plan
Technical
Strategic
Tactical
Financing Plan
Optimal
Plan
5
Iterative Process
…It involves six key Elements
Element 2
Facility
Assessment
Element 1
Market
Assessment
Element 3
Needs
Assessment
Element 4
Strategy
Development
Element 5
Plan
Development
Element 6
Plan
Implementation
Interviews
– Port staff
– Governing
entities
Define Issues
Facility
Inventory
Opportunities
and Constraints
Throughput
Capacity
Analysis
Interviews
– Stakeholders
Segmentation
of business
lines
Identify market
drivers
– Regional
demand
– Industry
trends
Provide future
volume
forecasts
Compare
capacity with
future volume
forecasts
Identify
operational
improvements
to maximize
assets
Identify future
facility
expansion
needs
Identify target
market
opportunities
Determine
success factors
Identify
necessary
actions
Develop
strategic
implementation
plan
Identify
alternatives
Evaluate
feasibility
Quantify
benefits and
impacts
Test against
project
objectives
Conceptual
design
Cost Estimates
Prioritize
projects
Capital
improvement
plan
Construction
sequencing
Identification of
project triggers
Project
financing
Staff / Public
Meeting
Staff / Public
Meeting
Executive Level
Meeting
Plan Disclosure
Meeting
Project Kickoff
Meeting
And should be designed to build consensus throughout development
6
Capacity Measurement involves analysis of a system of
individual components
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Annual Throughput CapacityAnnual Throughput Capacity
Vessel
Operations
Vessel
Operations
The volume of cargo that a subject facility can reasonably
handle within a twelve month period
Overall facility capacity is controlled by the limitations of the
smallest component
Capacity can vary greatly across a sample of international
ports due to market conditions and predominant operations
The volume of cargo that a subject facility can reasonably
handle within a twelve month period
Overall facility capacity is controlled by the limitations of the
smallest component
Capacity can vary greatly across a sample of international
ports due to market conditions and predominant operations
Berth
Operations
Berth
OperationsApron to
Storage
Apron to
Storage StorageStorage
Gate
Processing
Gate
Processing
Intermodal
Transfer
Intermodal
Transfer
The goal of future facility planning is to economically provide a balanced system that meets customer needs while maximizing asset utilization and operational flexibility
7
Many of the variables are not within the control of the Port
Vessel Operations
A function of vessel call dynamics
Trade lane economics and
regional market demands define
typical vessel capacity
Horizontal geometry and draft
limitations of approach channel
predict maximum vessel capacities
Liner service design, in
conjunction with multiple ports of
call, limits cargo transfer
opportunities per call
Berth Operations
A function of equipment capability
Operational speed / capacity
Equipment downtime
Number of units deployed
Operator skill / work rules
Vessel stowage plan
Hampered by varied moves
Hatch cover moves / re-stows
Cellular versus deck stowage
Crane repositioning
Apron to Storage
Equipment deployment and gang
size
Facility layout and traffic
considerations
Reefer handling
Bomb carts versus chassis loads
Number of lanes under the crane
Container inventory systems
Queuing time at quay crane versus
yard queues
Storage
Yard storage configuration and
density of loads
Average cargo dwell time (inbound
/ outbound and loads versus
empties)
Distribution of loads and empties
Terminal operating system
deployed
Block stowage / transshipments
Deployment of equipment
Unproductive moves
Work rules
Gate Processing
Number of operational lanes
Hours of operation
Technology and personnel
deployment
Peak versus average processing
time / reversible lane applications
Queuing capacity / pre-check ops.
Ratio of productive moves to balks
Terminal access geometry,
roadway capacity, and intermodal
split
Intermodal Transfer
On-dock versus near-dock facility
Loading track length and number
Train arrival and departure
activities
Ramp resetting
Ability to pre-stage cargo
Loading equipment deployed
Operating hours
Overhead clearance for double-
stacked rail cars
Work rules
This is just a sampling. There are a number of additional variables to consider…
8
Capacity measurements can vary from port to port, and
involves physical, cost, and quality considerations
Capacity is a function of both supply and
demand
It collectively incorporates
– Intrinsic ability – nominal capabilities
of facility assets
– Utilization – measure of how
intensely assets are or can be
employed
– Productivity – measure of how well
resources are or will be performing
Quality of capacity affects costs of
operations, and services
An important measure for determining
long-term expansion programs
It varies significantly between individual
port facilities
Unconstrained Capacity
Market Factors
Work Rules
Operations
$
Annual
Throughput
Capacity
Understanding Capacity
Constraints requires a top-
down approach
9
In simple terms, “Need” is defined as future demand minus
existing capacity
Forecast Year
Comparison of future forecast volumes to facility capacity
Containerized cargo business line
An
nu
al
Th
rou
gh
pu
t
00
0’s
TE
Us
History Future
Existing Capacity
Need
Future facility
improvement must be
online by this date to
facilitate future growth
Future capacity improvements
10
However ranges in estimates can greatly influence the
ambiguity of future facility needs, solutions, and timing
Forecast Year
Comparison of future forecast volume ranges to facility capacity ranges
Containerized cargo business line
An
nu
al
Th
rou
gh
pu
t
00
0’s
TE
Us
History Future
Future Capacity Range
Future forecast Range
High
Base
Low
Implementation
timeframe is very
unclear
Very broad
capacity
estimate
When the capacity range in question represents an almost $200 million investment in infrastructure, the level of investment risk can be high
Potential
infrastructure costs
~ $200 mil.(2012)
11
0
500
1,000
1,500
2,000
2,500
3,000
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
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20
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15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
Inc
rem
en
tal c
ost
$
Measures for benefits and incremental operating costs
over time better defines the implementation window
Comparison of incremental operational costs with future benefits
Containerized cargo business line
An
nu
al
Th
rou
gh
pu
t
00
0’s
TE
Us
Forecast Year
Maximum Capacity
Economic Capacity
Operational Capacity
Incremental Costs
Project
Implementation
12
Extract key
themes and
performance
metrics from
baselining work
Plan development involves evaluation of capability gaps,
potential solutions, and organized set of target alternatives
CAPABILITY GAP ASSESSMENT PROCESS
Conduct
quantitative
benchmarking
Use hypotheses to
drive focused
analyses of
improvement
alternatives
Conduct qualitative
best practice
assessment using
capability templates
Frame the
capability gaps and
scope the
improvement
potentials
Capture all
improvement
opportunities and
target priorities
Organize
Alternatives
POLICY OPS CAPEX
13
Alternatives are tested against a set of performance criteria
to identify the most preferred set of projects…
NP
V
(Mari
tim
e
On
ly)
NP
V
(Mari
tim
e &
Co
mm
erc
ial)
IRR
DC
R
Baseline 2 2 4 4 4 2 9
1 4 2 2 2 0 4 7
2 4 4 4 4 2 4 11
3 4 2 2 2 0 4 7
4 2 2 2 2 0 4 6
5 4 2 4 4 2 4 10
Ranking Key: 4 = Good 2 = Average 0 = Poor
Fin
an
cia
l
Sco
re
Scenario
Project Financial Performance
Cap
ital
Investm
en
t
Eco
no
mic
Ben
efi
t
Both Qualitatively Potential Metrics for
Development Evaluation
Financial
– Revenues
– NPV
– IRR
– Payback period
– Debt Service Coverage Ratio
Economic Benefit
– Direct
– Indirect
– Induced
Environmental
Operational
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
0 500 1000 1500 2000 2500
Financial
Break-even Point
Revenues
Expenses
Short Tons (000)
$ (MM)
Economic Impact
Break-even Point
Phase 1
Capacity
Phase 2
Capacity
Phase 3
Capacity
And Quantitatively
14
CAPEX Prioritization
Should
Must
Prioritisation of
Projects
Project A Project B Project C
Project D Highest
Priority
High Low
Not pursued
Lowes
t
Priority
Forced out due to new
project
… And organized according to priority
Must Have
Significant NPV impact
– For sales reasons, customer leaving
– For technical reasons, replacement
needed
Contractual/legal requirement
Regulatory requirement
Should Have
For sales reasons - competitive
threat/market need
For technical reasons - old, risky but
functional equipment
Nice to Have
For sales reasons with limited NPV impact
For technical reasons - can be postponed
Future upgrade to new technology
Pro
jec
t E
vo
luti
on
Sta
ge
Unplanned project – additional
investment
Nice
Benefits
Clear transparency achieved
Matching top–down and bottom–up
perspective
15
A pro forma analysis of the future business is necessary
for bringing the project to financial markets
Revenue Expenses
CAPEX Funding
MSPA Port of Gulfport Restoration Financial Model
Key Financial Results Volumes By Customer/Activity
2009 Valuation Before Grants &
Insurance
After Grants &
Insurance NPV of Revenue By Source - US$ 000 (2010 - 2040) Capital Expenditures 2010-2015 2016 - 2020 Total Project Funding 2010-2015 2016 - 2020 Total
NPV (312,325)$ 188,103$ Crowley 47,092$ Admin. Permits, & Mitigatin 279,203 55,155 334,358 Capex (744,040) (368,028) (1,112,068)
IRR 3% 25.8% Dole 27,338$ Fill & Common Area 195,947 243,873 439,820 FEMA Insurance 48,000 - 48,000
ICR 0.4 1.2 Chiquita 29,325$ Temp Facilities 45,000 - 45,000 CBDG-HUD Grant 566,000 - 566,000
DuPont 2,355$ Crowley 17,550 11,500 29,050 MSPA Cash 130,040 46,028 176,068
MSPA Discount Rate 6% Multipurpose 46,353$ Dole 50,910 - 50,910 Bonds - 322,000 322,000
Debt Financing (2010-2020) New Public Container Terminal 100,016$ Chiquita 50,910 - 50,910 Balance - - -
Total Bond Requirements 322,000$ Other Maritime Services 1,915$ DuPont - - -
Security & Vessel Fees 23,475$ New Multipurpose Terminal 34,320 34,500 68,820 Dredging - 45 ft. - 356,000 356,000
DSCR Min 0.6 Non-Maritime 142,389$ New Public Container Terminal 70,200 23,000 93,200 State (25%) - 89,000 89,000
Max 3.7 Total 420,259$ Total 744,040$ 368,028$ 1,112,068$ Fed (75%) - 267,000 267,000
Average 2.0
Major Financial Assumptions
Macro Assumptions Grant Funding Available Bond Capital Requirements
Inflation 2.50% FEMA Insurance Proceeds 48,000$ Coupon/Interest Rate 6%
Interest on deposits 2.00% HUD-CDBG 566,000$ Amortization (Years) 25
Volume & Rate Assumptions
Volume Growth Rates New Multi Purpose Terminal Rates (2010 $$) New Multi Purpose Terminal Rates (2010 $$)
Crowley 4% Per Acre Rent -$ Per Acre Rent 25,000$
Chiquita 1% Wharfage (per ton) 1.96$ Wharfage (per TEU - on First Phase Only) 1.80$
Dole 1% Mooring/Unmooring 300.00$ Dockage (per ft LOA) 6.07$ Min 4.2%
DuPont 2% Dockage (per ft LOA) 6.07$ Harbor Fee (per vsl) 300.00$ Max 7.5%
Multipurpose Terminal See Vol. & Cap. Sheet Harbor Fee (per vsl) 300.00$ Future Expansion Royalty (per TEU) 7.00$ Avg. 4.5%
New Public Container Terminal 2.00
Facility Capacity & Development Assumptions
Acres Total Capacity Acres Total Capacity
Crowley 4500 TEUs/Acre 15 67,500 30 135,000 TEUs
Chiquita 4500 TEUs/Acre 25 112,500 30 135,000 TEUs
Dole 4500 TEUs/Acre 24 108,000 35 157,500 TEUs
New Public Container Terminal 8500 TEUs/Acre 70 595,000 70 595,000 TEUs
134 883,000 165 1,022,500
DuPont 85,000 Tons 5 425,000 - -
Multipurpose Terminal 66,667 Tons 5 333,335 30 2,000,010
144 Acres 195 Acres
Fees as % of Operators
Revenue
Per Acre CapacityExisting Terminals New Terminals Acres (First Phase Only)
MSPA Pro Forma Revenue By Source(US$ 000)
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
New Public Container Terminal Multipurpose
DuPont Chiquita
Dole Crowley
Security & Vessel Fees Other Maritime Services
MSPA Pro Forma Net Assets vs Liabilities(US$ 000)
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
Net Assets Total Liabilities
MSPA Pro Forma Cumulative Free Cash Flow Before Financing(US$ 000)
0
0.5
1
1.5
2
2.5
3
3.5
4
-$400,000
-$300,000
-$200,000
-$100,000
$0
$100,000
$200,000
$300,000
$400,000
$500,000
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
Cumulative Free Cash Flow Before Financing (Left Axis)
Debt Service Coverage Ratio (Right Axis)
Crowley Maritime Corp. VolumeTEU
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
Crowley Volume (TEUs)
Chiquita Fresh North AmericaTEU
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
Chiquita Volume (TEU)
Dole Fresh FruitTEU
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
Dole Volume (TEU)"
DuPontTons
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
DuPontVolume (Tons)
New Multi Purpose TerminalTons
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
New Multi Purpose Terminal (Tons)
New Container TerminalTEU
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
New Public Container Terminal
45 ft / Max 6,000 TEU Vsls.
Analysis
(Strategic Economic Financing and Planning Model)
Financial Projection Categories
16
Net Present Value (NPV)
2009 $ million Internal Rate of Return (IRR)
Minimum
$50 million
Minimum
7%
Source: CH2M HILL Analysis
Notes:
All figures are after grants & other sources of funds , but before financing
Sensitivity ranges based on 10% increase or decrease in on-site capital expenditures
Minimum benchmarks are CH2M HILL recommendations and may vary based on State and Local guidelines
Net Present Value is based on an assumed 6% discount rate
Investment Cover Ratio (ICR)
Minimum
1.0
Sensitivity Range
$75 - $220 million
Sensitivity Range
8% to >12%
Sensitivity Range
0.8 to 1.4
Debt-Service-Coverage Ratio (DSCR)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Minimum
1.5 – 1.75
Guarantee likely
to be required
Before detailed financial structuring, projects must clear
specific financial hurdles, and tested for uncertainty
17
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Container Terminals Operations & Planning
Presentation
Long Beach, CA
September 10, 2013
Copyright 2013 by CH2M HILL Inc.
Reproduction and distribution in whole or in part beyond the intended scope of the contract
without the written consent of CH2M HILL Inc. is prohibited.